[Senate Hearing 106-176] [From the U.S. Government Publishing Office] S. Hrg. 106-176 MANAGEMENT REFORM IN THE DISTRICT OF COLUMBIA ======================================================================= HEARING before the OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE of the COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS FIRST SESSION __________ MAY 3, 1999 __________ Printed for the use of the Committee on Governmental AffairsU.S. GOVERNMENT PRINTING OFFICE 57-947 cc WASHINGTON : 1999 ------------------------------------------------------------------------------ For sale by the Superintendent of Documents, Congressional Sales Office U.S. Government Printing Office, Washington, DC 20402 COMMITTEE ON GOVERNMENTAL AFFAIRS FRED THOMPSON, Tennessee, Chairman WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut TED STEVENS, Alaska CARL LEVIN, Michigan SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey THAD COCHRAN, Mississippi MAX CLELAND, Georgia ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina JUDD GREGG, New Hampshire Hannah S. Sistare, Staff Director and Counsel Joyce A. Rechtschaffen, Minority Staff Director and Counsel Darla D. Cassell, Administrive Clerk ------ SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND THE DISTRICT OF COLUMBIA GEORGE V. VOINOVICH, Ohio, Chairman WILLIAM V. ROTH, Jr., Delaware RICHARD J. DURBIN, Illinois JUDD GREGG, New Hampshire ROBERT G. TORRICELLI, New Jersey Kristine I. Simmons, Staff Director Marianne Clifford Upton, Minority Staff Director and Chief Counsel Julie L. Vincent, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Voinovich............................................ 1 WITNESSES Monday, May 3, 1999 Hon. Anthony A. Williams, Mayor, District of Columbia............ 2 Linda W. Cropp, Chairman, Council of the District of Columbia.... 5 Alice M. Rivlin, Ph.D., Chairman, District of Columbia Financial Responsibility and Management Assistance Authority............. 8 Alphabetical List of Witnesses Cropp, Linda W.: Testimony.................................................... 5 Prepared statement........................................... 38 Rivlin, Alice M., Ph.D.: Testimony.................................................... 8 Prepared statement........................................... 43 Williams, Hon. Anthony A.: Testimony.................................................... 2 Prepared statement with attachments.......................... 19 APPENDIX Report of the Special Committee on Police Misconduct and Personnel Management of the Council of the District of Columbia, October 6, 1998, submitted by Linda Cropp............ 55 Responses to questions submitted by Senator Voinovich for Mayor Williams....................................................... 169 MANAGEMENT REFORM IN THE DISTRICT OF COLUMBIA ---------- MONDAY, MAY 3, 1999 U.S. Senate, Oversight of Government Management, Restructuring, and the District of Columbia Subcommittee, of the Committee on Governmental Affairs, Washington, DC. The Subcommittee met, pursuant to notice, at 3:32 p.m., in room SD-342, Dirksen Senate Office Building, Hon. George V. Voinovich, Chairman of the Subcommittee, presiding. Present: Senator Voinovich. OPENING STATEMENT OF SENATOR VOINOVICH Senator Voinovich. The meeting will please come to order. I would like to welcome Alice Rivlin, Mayor Williams, and Chairman Cropp to this hearing this afternoon. I was thinking before I came in, it was March 1995 when I testified before a House Committee that was looking at the D.C. Financial and Management Assistance Authority and never thought that I would end up in the Senate and Chairman of the Subcommittee that has responsibility for the District of Columbia. But I must say that I am very pleased about that, particularly because of my experience in city government. In the last 5 years, the District has undergone tremendous change. Now on the road to recovery, Washington, before appeared to be a city falling off the hill and sliding into the Potomac. I remember when I became Mayor of the City of Cleveland, there were people who said that the City of Cleveland was sliding into Lake Erie. The joke around town was, the last person leaving town, turn off the lights. But what is nice about cities is that if you get everyone together and make up your mind, you can make a difference. Although the District has transformed fiscal year and accumulated deficits to surpluses more quickly than anticipated, the financial condition is one of convalescence. That is another thing I have learned, is you cannot ever take anything for granted. Sometimes things are going well, and then if you do not pay attention, they have a way of sliding back. But as we all know, simply spending less money and balancing the budget are not sufficient. A city which generates fiscal year surpluses yet cannot educate and nurture its children or protect its citizens against crime or reduce a staggeringly high incidence of substance abuse is still dysfunctional. Problems still need to be addressed, including the constant problem of improving city services, to which I know the Mayor is very dedicated, and the Council, to doing something about. Having been a Mayor and Governor myself, I understand the difficulty in implementing systemic change. I applaud Mayor Williams for setting clear short- and long-term objectives that can be measured. By establishing a baseline performance measurement system for the city and its agencies, we should be able to address problems and concerns in a proactive fashion instead of participating in an ongoing exercise of triage. I want you to know, Mayor, I did go through these measurements. I think that they are terrific. I encourage the District Government to improve the confidence of its citizens in the government by holding agencies accountable for achieving results. Agencies should develop strategic plans, outcome-based goals, an explanation of how the goals will be achieved, and the method for measuring progress. I say to my directors, if you cannot measure it, do not do it. This Subcommittee will monitor and certainly encourage the implementation of a system to measure the progress and performance of management reforms in District programs and agencies. When I met with Dr. Rivlin and Mayor Williams, I said that I thought it would be good if you would come in and we could establish a baseline. I have been around government a long time, and so often what happens is that you get anecdotal stories about city services, and before you know it, some Senator or Congressman is off and running and they want to do this or do that. I think we are just better off saying, here is where we are. Here is what we have done and here is what we would like to do. Before I introduce the witnesses, I would like to say what a pleasure it has been to have an opportunity to meet with Mayor Williams and Dr. Rivlin, and I look forward, as I mentioned to you, Chairman Cropp, to visit with you. I was supposed to meet with Eleanor Holmes Norton on Wednesday, but that got put off and so we will be doing that. The Mayor and I have talked about his coming to Cleveland. I notice you could not make that date, but we will reschedule it. They are all excited about you coming. Mr. Williams. I am looking forward to it, Senator. Senator Voinovich. At this time, I would like to welcome and introduce our witnesses, the Hon. Anthony Williams, Mayor of the District of Columbia, the Hon. Linda Cropp, Chair of the D.C. City Council, and Dr. Alice Rivlin, Chair of the D.C. Financial Authority. Your cooperative efforts have been key to the city's success. I have always felt that Washington, DC, should be the shining city on the hill and I look forward to working with you to realize that potential. Mayor Williams, if you would like to begin, we would certainly like to hear what you have to say. TESTIMONY OF HON. ANTHONY A. WILLIAMS,\1\ MAYOR, DISTRICT OF COLUMBIA Mr. Williams. Mr. Chairman, we want to thank you and Members of the Subcommittee for your role in providing assistance to the District and, I think, the oversight we expect from our Council, from our Financial Authority, and from the Congress in a partnership to really bring our city forward. We are particularly delighted as employees and managers in our government to be able to work with you because of your experience in Cleveland and leading it back to recovery, your experience as a Mayor and a Governor and now as a Senator. So we are very delighted to have you here as the Chairman of our Oversight Committee. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Williams appears in the Appendix on page 19. --------------------------------------------------------------------------- I hope to learn lessons from you--for example, this trip to Cleveland--the way the community there has come together and is now leading the country, I understand, in production of housing in the city. It is something that we want to duplicate here in our city. We have come a long way financially from a fiscal point of view, but there is still much work that needs to be done to not only improve the fiscal deterioration of the city's infrastructure, but more importantly, to rebuild the faith and confidence of our government. In that respect, I wanted to just highlight a couple of the items that are in my written testimony, which I submitted for the record. But for the purposes of entering into a dialogue with you, Senator, I will just give you some highlights. One is on the area of accountability and responsibility. We have set a number of goals for our city, how to make our city a cleaner city, a more customer-friendly city, a city that is more friendly to business, and a city that is really a beacon of hope and opportunity for everyone by providing the critical human service network activities that a city has to provide and that have been neglected in our city for some time. In the first instance, we have set a series of short-term actions along those lines, and I am pleased to report, as I have included in my testimony, that on many of these measures, with the notable exception, I might say, of the Department of Motor Vehicles, and even there, I think there has been improvement, I have heard from our citizens, we are on the way. I mentioned the Thomas Circle underpass, opening that up. That was a symbolic thing, not a major thing, but in terms of an irritant to our citizens, it proved to be important. Making headway on electrical inspections, again, not a major thing if you look at our overall operations, but again, giving the business community a sense that we are working in partnership with them to include not only the Department of Consumer and Regulatory Affairs but also reaching out to the Board of Zoning Appeals and making improvements there. The Gateway Beautification Initiative, launching an effort, a multi-agency effort initially focused on our gateways, and then moving from there into looking at where we have our major traffic circulation, where we need to do a better job of sending out a good impression of our city, a Potemkin strategy. Catherine the Great's assistant Potemkin cleaned up the corridors as she traveled around the country. You know, it was criticized by historians because all they did was clean up the corridors, but if you can clean up the corridors and at the same time do the background work to improve the overall neighborhoods, it is not a bad strategy. We are moving from these short-term agenda items to a long- term strategic planning process in the District, which is really going to have a number of major components, chief among them performance indicators. We are going to be including in our budget submitted to the Congress a performance accountability plan, which will be the first step in moving in that direction. As I have stated in my testimony, we have learned a great deal from our residents over the campaign trail, in talking to residents in a series of community meetings, but we are also launching an effort beginning with a customer survey we have underway to get an assessment from our residents of where we stand right now. Then using that, to begin by the fall of 1999, we hope, using both the resources from our government, but very importantly, resources from the foundation sector to begin building a citizen planning process out in our neighborhoods that we hope to eventually link up with the strategic planning process we are going to be engaging our agency and division directors in. So, ultimately, the work of our city as a whole, and I hope it is not just our government but our community as a whole, our agency directors, is going to be fed and informed by real citizen needs. So that is what I call the neighborhood strategies. Another important feature here is that we are going to be developing a D.C. scorecard, informing the public of this goal setting and performance measurement system, and it has been an effective preliminary conversation to set these community expectations. We have worked with an organization called the D.C. Agenda, An Alliance for Redesigning Government, George Washington University's Center for Excellence in Municipal Management. We work with all these different organizations, developing a process for tracking changes in community conditions both critical to our residents and for engaging the public in gauging the performance of important services offered by the District Government. Over the past year, this partnership has conducted research of similar priority-setting initiatives in other jurisdictions cited as best practices and they have come up with Portland, Oregon, Phoenix, Arizona, and Charlotte, North Carolina. In Attachment III, we list the indicators and associated measures that are going to guide the work of our agency heads. They are more outcome-oriented than they are output-oriented, though they are really not truly outcome measures in the sense that they really do not get to ultimately do what, for example, a department wants to accomplish, but they are well down that road. Another device that we are going to be using, and we have begun to use it in the year 2000 budget, although we have much work to do, is the notion of benchmarking, asking our agency directors to compare their level of operations, compare their achievement of outcomes to the best practices around the country. There, in the work we have done already, we have used the cities of Detroit, Indianapolis, Philadelphia, Phoenix, and Portland, Oregon. Those are included in Attachment IV. Very importantly, there are ideas that our agency directors, our citizens have to have some way of comparison on an apples-to- apples, oranges-to-oranges basis to really understand what services we are performing in what kind of cost-effective way. Finally, in terms of reporting, in addition to providing annual reports on performance to the District of Columbia City Council and the U.S. Congress within the proposed and final budgets, we are going to institute monthly and quarterly reporting on agency level measures and quarterly reporting against these community indicators. The report format and procedures will be designed by the end of June and the first agency reports will be issued by mid-July. All in all, again, what we are trying to do, Senator, is to listen to our citizens, listen to their statement of where we stand and build with them a consensus on where we want to go and then hold ourselves publicly accountable on the steps we have taken, the accomplishments we have achieved to reach that goal. So I believe it is very important and I have not really included it here in our testimony that this balanced scorecard that we are talking about is reviewed and validated by the Inspector General. In appointing, or at least nominating for the Control Board and the Council's consideration a new Inspector General, I took a lot of time and effort to talk to the candidates about the need to do aggressive performance auditing, although I will regret this, I am sure, a year from now, but to do aggressive performance accounting and to take a real leadership role in taking this scorecard and comparing how we are doing on our scorecard with how these other best practice cities are doing. I notice that in, for example, Phoenix and in Portland, Oregon, their city auditor did this kind of validation and I think it could be very useful to assure our citizens and assure the Council, the board, and ultimately the Congress that we have actually made the headway we are stating we have made. That concludes my testimony. As you can expect, I would be happy to answer any questions you may have. I appreciate the opportunity. Senator Voinovich. Thank you. If it is all right with everyone, I would like to give Chairman Cropp and Dr. Rivlin a chance to testify and then we can open it up for questions. I would like to say that one of the things I learned as Mayor is that the Council was 51 percent of the action. One of the nicest things that happened to me when I left the Mayor's job was there was a wonderful article in USA Today. It was an article about two individuals, the Mayor of the City of Cleveland, the short, white Republican, and the tall African American Council President that worked together to make things happen in our town. Mayor, I have always said the Council is 51 percent of the action. If you know that, then you get along real well. We know that what the Council is doing is going to have a great deal of impact on how successful the Mayor will be and also how successful the Council will be. You have a symbiotic relationship with each other, so we welcome you today. TESTIMONY OF LINDA W. CROPP,\1\ CHAIRMAN, COUNCIL OF THE DISTRICT OF COLUMBIA Ms. Cropp. Thank you very much, Senator. I appreciate your comments. The Mayor and the Council are working very closely together to make Washington, DC, the type of city that we would like for it to be. --------------------------------------------------------------------------- \1\ The prepared statement of Ms. Cropp appears in the Appendix on page 38. --------------------------------------------------------------------------- We found ourselves being new roommates, however, and when you are new roommates, you have to decide whose turn it is to wash the dishes or vacuum the floor, and we are in the process of doing that. So we are in the process of learning all of that, but it is coming along and I think as we continue this approach, Washington, DC, will do much better. The best thing about it is that we are willing to make sure that the arrangement is a successful one, and when there is the will for that and when there is the understanding that we need to have constant interaction, I do believe that we will be successful with it. I am happy to be here with my colleagues, Mayor Anthony Williams and Alice Rivlin, today as we come before you to talk about the government's system for measuring the progress of performance of our management reform program and its agencies. Let me begin by saying that management reform is a collaborative process. The Council has been working in partnership with the Executive Branch and the Financial Authority to correct longstanding deficiencies in management and program operations. There are a number of ongoing management reform initiatives and each of us has a role in order to make sure that we have success in these initiatives. The Council has set its 1999 and 2000 legislative agendas, the theme of which is community building and a government that works. In establishing our legislative agenda, there were four strategic priorities: Individual empowerment, neighborhood revitalization, economic growth, and government performance and accountability. It is our belief that when you do that in partnership, with the Mayor that it will help all of us to achieve. The Mayor and the Council do not always agree on everything. I often say that I have been married to my husband almost 30 years this year. I love him madly, and I do not agree with everything that he says, but that is OK. I think that is part of good government, for us to move forward in that way. It helps to stimulate debate, and in stimulating the debate and when we come together in consensus, it will initially help the outcome to be an outcome that is more beneficial for everyone. To ensure the long-term success of management reforms, the Council has already taken a number of steps, but there is much more to do. The Council has taken an active role in requiring performance measures for District agencies and publicly funded activities. In 1995, the Council enacted the Government Managers Accountability Act, which requires the establishment of performance measures and an accountability plan for every agency and activity in the District that uses any type of public funds. This fiscal year, the Council is working closely with the D.C. auditor in monitoring the implementation of this Act, including assessing the reliability of the performance data, the accuracy of the performance measurements, and the level of success in achieving the performance measures. In the past 2 years, prior to the budget process, the Council has had a set of hearings dealing solely on performance measures, and when we have held those hearings prior to the budget, we look at what performance measures have been identified and we look at where they have been achieved and how they have been achieved. It also provides the public an opportunity to come in and share with the Council and also with the executive as they see the outcome of the public hearings, exactly where we may still need to have growth, what we need to strengthen, and also where we have done exceptionally well and how we can then move on into other areas. The Council has found these public hearings on performance measures to be beneficial not only to us, but we hope to the executive agency directors, too, as they hear concerns and as they hear where they have done well. The Council has increased its oversight of agencies and their programs. We have instituted a comprehensive review of agency spending and performance outcomes. The Council has used performance measures as a tool in linking resources to results in its review of the fiscal year 2000 budget. We want to ensure that the government resources are linked to specific performance goals and measurements. Goals and measurements then can not only be tracked by the District Government, but by the District residents, as well. Pursuant to its oversight responsibility, the Council has also established special committees to investigate specific management and operation issues when appropriate. Last year, the Council investigated the Metropolitan Police Department and issued a report with recommendations for management reform within that Department. It was a comprehensive report and comprehensive investigation that, hopefully, will help all of us to move in a more positive direction with the Metropolitan Police Department. Senator, if you do not have a copy of that report, we will make sure that you get a copy of it. This year, the Council will undertake a similar investigation of the special education program within the D.C. Public Schools, an area of great concern for us, and we would like to be able to look at that issue, look at the concerns, and, hopefully, come together with a meeting of the minds with all who are involved. The Council has also assisted in management reform initiatives by enacting legislation which encourages performance and accountability. During 1998, the Council enacted comprehensive personnel reform legislation, the Omnibus Personnel Reform Act of 1998. This creates a core of senior managers who will have at-will employment status, raises executive pay to recruit and retain top managers, creates a new system of performance evaluation that links employee step increases to performance, streamlines grievance and discipline procedures, and authorizes cash incentives and gain sharing programs for employees to encourage and reward good performance. This law that the Council passed is an excellent tool that can be utilized by the Mayor as he moves forward in trying to do his performance measures. In 1996, the Council enacted procurement reform. The Procurement Reform Amendment Act of 1996 centralize the District's procurement activities under the direction of the Chief Procurement Officer. By working together, the Executive Branch and the Council, the District's procurement operation has greatly improved. This has resulted not only in reduced costs of supplies and equipment, but also improved service delivery to District residents. Along with the management reform initiatives, the District is implementing regulatory reform. Last year, the Council approved two comprehensive business regulatory reform bills. These legislative initiatives are part of the Council's ongoing efforts to address regulations which unnecessarily and inappropriately impair economic development in the District. The omnibus legislation addresses a number of regulatory reforms, including business licenses, insurance premium tax, health regulations, elimination of obsolete and redundant boards and commissions, building and land use regulations, vending regulations, and unemployment insurance and workers' compensation, which was no easy task. There was an awful lot of work that went into it, and a lot of really hard decisions, particularly when you look at the workers' compensation piece. Finally, the Council has not exempted itself from management reform. The Council commissioned a study by the National Conference of State Legislatures and worked cooperatively with the Appleseed Foundation in their study of Council operations. The Council has already implemented some of the recommendations from these two studies and is in the process of implementing others. In conclusion, the residents of the District and its employees alike will share in the results of management reform--improved quality of service, reduced costs, efficiency, and effectiveness. The Council will continue to work cooperatively with the Mayor and the Financial Authority in implementing management reform initiatives and monitoring the results of these initiatives. And possibly more importantly, we are not going to slide into the Potomac, Senator. We have stemmed the erosion that is occurring. We have stabilized the shoreline and we have strengthened our infrastructure, and we are in the process of pulling out a cloth and shining up everything that is there so that we can be that beacon that we ought to be, the city that is the capital of this greatest country in the world. There is a new sense of hope that can be seen very easily among District citizens. You see shoulders back and heads held high. It is with a new pride, a new hope, and a new determination that with all of us working together, we can make Washington, DC, the type of city that we all want it to be and know that it can be. Senator Voinovich. Thank you. Ms. Rivlin. TESTIMONY OF ALICE M. RIVLIN, PH.D.,\1\ CHAIRMAN, DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY Ms. Rivlin. Thank you, Mr. Chairman. I, too, am very pleased to be here with my two colleagues from the D.C. Government, Mayor Williams and Chairperson Cropp. We have been seeing a lot of each other recently. I did not exactly think of us as roommates, but we have been working very hard in long meetings to work out D.C.'s budget, to keep it balanced, and to improve the services. --------------------------------------------------------------------------- \1\ The prepared statement of Ms. Rivlin appears in the Appendix on page 43. --------------------------------------------------------------------------- The District of Columbia, as you said at the beginning, has come a long way since the dark days of escalating deficits, looming bankruptcy, and service breakdown that forced the Congress to create the Authority that I chair. The budget has been in surplus for 2 full years. Fiscal year 1999 will be the third. We are now working very hard to have a balanced budget in fiscal year 2000. The accumulated deficits are paid off. Our credit rating is improving. I agree with Chairperson Cropp that we have a new spirit of hope. We have vigorous new leadership in the Mayor, a strong, active, very vocal Council under Linda Cropp's leadership. The role of the Authority at the moment is to help forge a consensus on the budget that will contribute to the long-run fiscal strength of the District of Columbia and to encourage the efforts of the elected officials to improve the efficiency and the effectiveness of D.C.'s public services. We want to go out of business, but we want to go out of business leaving behind a very strong city. We strongly support the Mayor's efforts to improve the services to D.C. residents and we believe he was right to start with some immediate short-run, visible progress and then move on to the harder, more complex problems that will take longer. Performance measurement must be central to service improvement. We need to find out from a broad range of citizens what they want most from their government. We need to devise measures of success in delivering what people want. And we need to measure the outcomes and the cost of delivering them as accurately as possible and to keep a continuous record of what is actually happening so citizens can see the record and judge for themselves how well the government is doing. Now, that sounds great, but it is not easy. I am a veteran of quite a few efforts over a long time, several decades, actually, to do this kind of thing, so I know how hard it is, although I believe that performance measurement is generally more feasible at the local level where services are delivered directly to people than it is at the State or the Federal level, where you often have a lot of intermediaries. The District of Columbia has the advantage of coming late to this process and can learn from the experiences of other cities, some of which the Mayor mentioned, that are doing a good job. Let me point out a couple of hazards. It is easiest to focus on the services or the aspects of services that are easy to measure--waiting times, potholes filled, trees trimmed, those kinds of things that you can get at quite quickly--and these are not necessarily the most important things. A second hazard is that the measures themselves, if you are not careful, can distort the outcomes. A classic example is a training program where the measure is people placed in jobs. If you take that measure, it generally leads to the people who run the program working hardest with the people who are easiest to place, many of whom might have had jobs anyway, or to concentrating on getting people into any job, however temporary, rather than one with long-term prospects. Teaching to the test is another example, or getting children placed in foster care without adequate screening or follow-up if the measure is placement. So those kinds of things are all pitfalls which make it more difficult. This is emphatically not an argument for not doing performance measurement; it is an argument for doing it well. We will work hard with the Mayor and with the Council to give our support for a thorough, long-lasting effort to measure the performance of the D.C. Government and to get those results to the citizens and to the Congress. Thank you. Senator Voinovich. Thank you. Chairman Rivlin, have you had a chance to review the measurements that have been put in place and comment on them? Ms. Rivlin. We have had a chance to review them. It is sort of a continuous chance, because they are changing all the time and being improved. But, yes, we have, and we have access to it and, indeed, before the Mayor became Mayor, this effort got a good start, I think, under Chief Management Officer Camille Barnett. Senator Voinovich. And you will be reviewing those and giving your opinion on them independently and sharing those with the Mayor and Council? Ms. Rivlin. We will. We are not shy. Senator Voinovich. Great. That is good. They will have a chance to take advantage of your expertise. I have a series of questions here, but I would just like to comment on a couple of things. You are talking about your Department of Motor Vehicles, and I do not know if I mentioned this or not when you were in the office, but ours was in such bad shape that I went to the East Ohio Gas Company and asked them if they would lend us their top person who ran their whole motor vehicle division and they went to work for the city and spent almost a year and they trained the individuals there, a very fine person, but just did not have the background or education and experience to get the job done. It is amazing what a difference it made because of our making that person available. You were talking about your gateway corridors that are really key in terms of the appearance of the city, and one of the partnerships that I want you to visit with is Clean Land Ohio, which is an organization that was set up by the private sector to take those most conspicuous parts of the city and have the private sector ``adopt'' them. Basically, they pay $3,000 to come in and then every year they pay $250 and a private outfit maintains these areas. It is quite interesting. There is a very nice sign that is there. It has made a big difference. On the customer survey--what kind of a survey are you going to be using? I know you had one, but is this going to be a polling thing or how are you going to do this? Mr. Williams. The initial survey--and I can give you more detail from Norman Dong, who has been working on this--but the initial survey is a series of focus groups as well as an instrument where we actually are doing a survey of city residents directly. Mr. Dong. We will go out in July and actually do polling, telephone research. Right now, we are getting assistance in trying to figure out what the measures should be. Senator Voinovich. Are you going to have a professional polling firm do this? Mr. Dong. Yes. We have one under contract already, and I think it is the same firm that did a customer survey for the Financial Authority several years ago. Senator Voinovich. I am interested in that. That is a motivator, because we used to do one every year. Unfortunately, I could not get the city to pay for it, so I had to use campaign funds, or I would get the Chamber of Commerce to do it. But there was a lot of interest in the various directors of the departments in terms of the results of that survey. It was something that they every year looked at and it was an incentive for them to do better. Mr. Williams. We would like to elaborate on that survey and, beginning this fall, begin building real strategic plans out in the neighborhoods that would feed into the overall plan for the city and look for help from the private sector and foundations to help us defray the cost of that. Senator Voinovich. The benchmarking, I think, is a good idea. In terms of your benchmarking, have you tried to find places that are similar, though, in terms of yours? Mr. Williams. I think the cities that we have looked at for benchmarking, we thought for a variety of different reasons seemed to match up well, although it is a work in progress. Detroit, Indianapolis, Philadelphia, some of the same problems, some of the same issues. They are larger size, but you can do the measurements and you can control for size. Phoenix and Portland, because I think they are seen as model cities in their achievement, but I think this could vary. The initial indicators--no one has really paid attention to this in the budget, but the initial indicators I get from looking at the benchmarking in the budget and in my former role as CFO is that we have got a lot of work to do. We have got some agencies where you have in a similar city one FTE may do, say, 700 units of work and in our city you have an FTE doing 20 or 25, so that raises a lot of questions. We did some benchmarking in my own office and found this to be the case, comparing to other executive functions. So there is just a lot of work to be done and we are committed to doing it. It gives you a sense of where you need to go. I mean, you can always make--I will put it this way--it raises issues. Ms. Rivlin. If I may chime in on that, I think that is right, but one of the reasons is that the District is so far behind on computerization and on really having a modern kit of tools for employees to work with and training them in how to do it, and that is one of the challenges. Ms. Cropp. One other piece, too, there is the upgrading of the infrastructure, but the other issue that is very important for us to get a handle on is the training of our workforce. As you stated with your DMV, it was not that the individual was not capable of doing it and did not have the intelligence to it, but sometimes they just did not know how to do it. We have found that in the District of Columbia. What we are committed to doing now is doing an assessment of our workforce and training our workforce into doing a good job, and if they cannot do that particular job, then the Mayor through the Personnel Act has the flexibility to take whatever the appropriate steps are in training or moving them into another area. Hopefully, after we move into this training of our workforce, we will really see a big difference. Senator Voinovich. Do you have anything in your budget for training of individuals? Ms. Cropp. Throughout the budget, we have different components with training in our budget. We have been looking at that, actually, for the past couple of years. One thing that I am really pleased with is that we are looking at our mid-level managers and we have a program in conjunction with several entities, a university, the World Bank, and others, where they send our workforce through a whole training program to train them how to do it. So we are looking at this somewhat comprehensively. Senator Voinovich. One of the things that I was surprised at, we did not put any money aside. If you look at good businesses, you will find that they put a lot of money into training, and unfortunately in government, the training dollars are never available. So we started it and the city set aside money for training, and on the State level, in terms of working with our unions, they gave up some of their pay increase that we matched or doubled for training because they thought that was very necessary and they were willing to give up a little bit, and so were their members, just to get money for training. I think up to $1,200 a year is made available now to each employee, and they sit down with their supervisor and figure out where it is that they need it. I know it is an added burden on a budget, but I think it is the kind of thing that if you work at it year after year, it can be very helpful. Ms. Cropp. It probably needs to be expanded as you go on, because I believe that the needs of the city will change constantly. So it is the type of thing where we will probably need to continually train and retrain our workforce in the area of need as needs of the city change. Mr. Williams. Senator, what we have tried to do is to develop a labor strategy that includes a healthy component and a commitment to training, so we lined up a group of law firms in the city who donated their practitioners, partners to work with us and came up with a proposed labor strategy that we are now working with the Council and the Board and labor unions on. It has a component of training, trying to provide foundation training for every employee, rehabilitation training for employees who need additional work based on a skills assessment, and specialized training for employees in certain areas, as well as the government saying, if you are an employee and for purposes of upward mobility and advancement, you want to do some continuing education along career lines somewhere in the District, the government would match a certain percentage of your training costs below a certain threshold. But to couple that training exercise with restructuring work down in the agencies and taking full advantage of this personnel reform that the Chairman was talking about, where we want to systematically go through the agencies and make sure that in all the mid-management positions, we have the very best people. I think we have made a mistake in the past of sometimes we have not spent enough training, and in some cases, we have done training but we have not done any associated restructuring or skills assessment, basically, and the training is not always as effective as it could be. Senator Voinovich. Who did your personnel plan? Ms. Cropp. Actually, it was a combination. It was initiated actually through a Council retreat, when we looked at the areas of the District where we were very weak and personnel happened to have been one. So the Council worked in partnership with the Executive Branch and the Financial Authority and all came up, using some outside help in coming up with a new piece of legislation that would change our whole way of operating. Senator Voinovich. Did you establish new classifications for all of your employees and benchmark them with the private sector, or how did you do that, or other governmental agencies? Ms. Cropp. We are still in the process of doing that, actually, and, in fact, we are looking at compensation level and benchmarks and all of that now. The Mayor has affirmed that it is doing a study on that currently and we hope to have that completed soon. I think the timeline is the fall. Mr. Williams. Right, to go through the agencies, set new positions with new classifications and compensation, do skills assessment, work with the unions, but then everyone in the organization will compete for the new positions. So we are doing that in the Department of Human Services as a way to reconstitute the workforce and I have a lot of confidence that this could prove to be very successful and allow us to get the best people in the right jobs. Senator Voinovich. I would really be interested in what you are doing there, because I know this from experience, that it is very difficult, getting a good classification system. And, of course, you have some disruption with people who get reclassified. We did that when I was Mayor and it was tough. I hate to admit this, but we ran out of time on the State level. It was such a complicated thing. I know I said to the new Governor, Governor Taft, that if you are going to do this, you had better start in your first year because it is a long process. I would be really interested in having you share with me and the Subcommittee what you are doing in that regard. One of the things that I must say, Mayor, that seems to be pretty ambitious on your part is this quarterly reporting. Do you have some kind of a software package that you put in place that makes it easier for your managers? Have you started to get their quarterly reports yet? Mr. Williams. As you know, Senator, as a manager, it is hard to get any kind of report from your managers, just a regular narrative report. And I would agree that this is ambitious, but I have always believed that you ought to try to be somewhat realistic but to set an ambitious goal and work toward it, because if you set a relaxed goal, it is harder to get there. I will say, as Alice was saying, there has been a lot of work done. I think one of the things that Camille Barnett left us was a lot of work done on the infrastructure performance measurements. They were actually farther along than one would think on the ability to do this reporting. But I would not underestimate the difficulty of it, having worked in the Federal Government trying to do it and as CFO trying to do it and now Mayor. Senator Voinovich. It is very difficult. We finished up with our management audits and came back with recommendations. We gave out, what is it, the Eagle Award, but we had some fun with our directors. It was public that they had certain things that they should do and we stuck the needle into those that were not getting it done and rewarded those that were. But, really, you have to dedicate the time to it in order to get it done. Do you have any things in place to encourage people to come up with suggestions on how they can improve the delivery of services or any kind of a reward program like the private sector has or anything like that? Mr. Williams. We have in the budget, and I think the Council is in agreement with this, we have proposed that we institute a program of gain-sharing where we give our employees and our managers, our work units, the incentive to come up with new ideas and implement those ideas and then take the gain from those ideas into rewards for the employees and reinvestment in plant and equipment in the work unit. I think that is going to give our people the incentive to do that. Also, I am a big believer--I did this when I was CFO, and I believe now that our managers and agency people, goal leaders-- sometimes they are not the same--who accomplish a certain result, under budget and ahead of expectations, should be rewarded for that. I did that as CFO and it worked very well if you have the right people and the right conditions. Senator Voinovich. There are a lot of packages out there that are employee incentive packages and I do not know how they fit in with what you can do legally, but we had a program in Ohio called Innovation of Ohio. We captured the suggestions from employees, individual employees and also we had total quality management, so we had teams. I gave out checks as much as $5,000 to State employees who came up with ideas that you could measurably show really saved money. Then they had a catalog of things they could choose, a television or something else, if they wanted to. Mr. Williams. That is a great idea. Senator Voinovich. And then, twice a year, I would be there to pat them on the back. It is amazing. It sounds like it is not that important, but it really made a difference. In the procurement program, you have put that in place, is that correct? Ms. Cropp. We passed new procurement legislation and there is a new procurement program that the executive is initiating in this year's budget. There is quite a bit of savings that we see coming out of the change in the procurement program. We hope that the laws and the legislation that was passed last year by the Council helps to make it go more smoothly. So we are hopeful. We still believe that there may be need for some additional changes. We will see what they are as we approach them. I guess the word may be flexibility as we watch and see what needs to occur. But the fiscal year 2000 budget will show, I think, about $14 million in savings in procurement by a new process that has been developed by the Executive Branch in the procurement area, and that is actually wonderful. I was really happy to see new parts that have been implemented and to see that it is really going to come to fruition and we will actually see savings from it. Senator Voinovich. Do you have a minority set-aside program like the SBA 8(b) program or anything like that in the city? Ms. Cropp. We have one set-aside. I will tell you, the Council also feels strongly that another thing that needs to happen in the city is that we need to keep business in the District as much as possible to help our economy. It seems to me that you need to first help at home and strengthen your economy, help your economy to grow, and then as you help your economy to grow, and if you do not have the wherewithal to do it in-house, then you go region, and then once you go region, then you go somewhere else. But, yes, we do, but I think it goes beyond that. That is part of it, but also, the Council's mindset looks at helping the economy within the District of Columbia, then helping the economy within the region. Senator Voinovich. I would be interested in your MBE program. it has been very difficult to maintain with the court cases, but---- Mr. Williams. We use the term local small disadvantaged business and try to use economic conditions, class, and status as proxy for official minority status, given all the case law and given where we are. We have put a good person in who is working with the Inspector General and even the FBI to see that we are doing what we are doing the right way and affording our contractors opportunities with big projects like Y2K, the convention center. We have made an enormous amount of progress in procurement if you were here 3 years ago. There is night and day difference, although we still have a couple problems. One is we still have issues with the Federal Government in getting our Federal resources into the agencies and out on the street. There is still congestion in the procurement there. I am worried about being able to do major initiatives like, for example, this major interchange, Barney Circle. We ended up not doing it. So in the last highway bill, thanks to some heroic work of folks like Congresswoman Norton, we were able to use these funds for local streets and change the ratios, a number of different things. It was great for the District. But we have to make sure we get these funds out into real improvements in the city, and what I have told our people is we have to leave on the table every means necessary to see that we get these resources out there. Finally, there are simple things like cars. We do fleet management, and we have got to look at every possible way to do our fleet management in the most cost effective way possible, including having GSA do it for us if they can do it most cost effectively. I am not saying we should do that, I am just saying we need to look at all the different opportunities out there from procurement in to get to the intended result, which is better service for our people. Sometimes the tail ends up wagging the dog. Senator Voinovich. I think that, as I said, I would be interested in the program that you have in place. That is one of the ways that you can responsibly help small businesses get into business. I think it is something that we all should strive to do within the framework of the new court cases that have come out. I would like to welcome Congresswoman Eleanor Holmes Norton. It is nice to see you. We are glad to have you here today. I guess we are not going to get a chance to see each other Wednesday, but we are going to reschedule that and I am looking forward to that. Mayor, one of the things that I would be interested in having you share with the Subcommittee is how are you going to deal with your directors in terms of holding them responsible for their performance? What do you anticipate? How do you plan on handling that? Mr. Williams. In the first 6 months, as we went through this 6-month short-term action process, the performance contracts for our agency chiefs were pegged to these short-term goals. So if you were doing Department of Housing and Community Development, you committed to me you would turn over 100 units of housing into home ownership by the end of 6 months and that was a measure, ad hoc as it may be, that was factored into your performance contract. So everyone is operating under a performance contract. Now we are asking for our agency heads, and we have begun to sit down with them with their what I would call interim strategic plans, a longer view to try to correlate their short- term items with their longer-term what I always call like Suez Canal projects, the long-term projects that every agency has to do. We fashioned these performance contracts now to incorporate the measures that you see here. So we have the measures in Attachment III, I believe it is, that are driving the agencies. Those would be factored in the performance contracts. They are evaluated on a periodic basis. If the agency director is not making it with these measures, then, obviously, they have got to find another line of work. Alternatively, if they are doing a great job, then, again, I believe that they ought to be rewarded with a bonus. Senator Voinovich. One of the things that I would also be interested in, you mentioned the performance evaluation the Council was looking into. I would be interested in what kind of a system you have, because that is another area that is tough. You hire people, get the contracts, and then have your managers do the performance evaluation of the people that work for them and then have the performance evaluation of their performance. As Mayor, the toughest job I had every year was to do the performance evaluation of my directors, which took just an enormous amount of time. But I would be interested in what system you have in place to guarantee that those performance evaluations are, indeed, getting done and how are you going to monitor that they are really indeed getting done. That is really important to me. I think people ought to know whether they are doing good or bad. I think part of the problem in government today is that people do not think anybody is paying any attention, and if they have to come in once a year and you talk about what they have been doing good and what they have been doing not so good, even if it is bad, at least they know somebody cares. So I think that is really a big area, and again, I would like you to share with me how you intend to get that done. Ms. Cropp. One of the things that is somewhat new that the District is doing is that a lot of the directors are signing performance contracts and it is somewhat helpful in a lot of ways. It spells out the tasks, the expectation. It gives an expectation level and a way in which they can measure it and the evaluating person can also measure it. I think it is something that is very beneficial in the long run. Senator Voinovich. One of the things that the Mayor and I talked about was quality management. I do not know, Chairman Rivlin, if we talked about it or not, but a lot of jurisdictions in the country today, a lot of governmental agencies are really looking at quality management as a way of involving their employees in decision making and creating teams. I know, Mayor, you have got lots on your plate. I know how you must feel, probably overwhelmed. But probably the most worthwhile thing that we did in State Government is make a commitment to quality management and really got our unions involved in it. In fact, they really ended up being the drivers of it and it is continuing. It has really changed the lives of people who work in State Government, because for the first time, they are involved. They get the training, they create teams, and they are involved. Their ideas are being looked upon. I do not know whether I shared this with the Mayor or not, but I had a terrible problem going back when I was Mayor in taking care of snow removal. We had all kinds of studies done and they came back. We implemented all these things. By the way, Mayor, this is a benchmark from around the country. It did not get done. So I finally just went crazy and just invited down all of the supervisors. They all came into my cabinet room and we spent about 3 hours together talking about why it was--I said it really bothered me that we just were not able to do snow removal. I said that the thing that should bother them, too, was that the suburbs were getting it done. It was like, well, now we are in Cleveland. It is not getting done. It was a bad reflection on our people. They came back and basically laid out what was wrong. They laid it out. There were not enough routes. They did not have mechanics that were out there in the districts to do the repair. The snow plow blades were not uniform, and in some instances they did not even have the equipment to get the job done. From them, we followed their advice and today, to this day, our snow removal is as good as the suburbs. But had we not gone to them and asked them for their ideas on how to do it, I am not sure we would ever have gotten it done. That is something you might look at down the road. Would you like to comment on anything else or share anything else with me? Mr. Williams. I think from the quality management, we have initiated something called Labor-Management Partnership, which I take as an effort to bring labor and management together to produce the kind of results that you are describing. As I quoted to you when we met, our improvement in the tax refund business--we were like the last, 55th among the States in sending back refunds--really improved because, I think like your experience in the snow removal, we did not use any consultants. We just sat down with the employees and said, why is the refund process completely broken. They gave us 20 different reasons and we fixed those 20 reasons and it improved. We also made investments and everything, but it was really working with the employees. So I am hoping that this Labor-Management Partnership, working not just at the top level where it has to exist but down in the agencies, can produce the quality results that you are describing and we are very excited about it. Senator Voinovich. Chairman Cropp, anything further? Ms. Cropp. Let me just conclude by saying that the District is moving forward. We are strengthening our structure. And I think we have established an excellent working relationship with the Financial Authority. In fact, the Mayor and the Chair of the Council have been invited to go into the meetings with the Financial Authority. I think it has been very helpful. As we look into transitioning back to home rule without the Financial Authority, even though we have this good working relationship, I look forward to working with Alice Rivlin outside of the government because we are structurally sound and we have done those things necessary for that to occur. We would like to have all the support that we can in order to enable us to do that and get there as quickly as possible. Senator Voinovich. I am looking forward to continuing to work with you. We have put together--Kristine Simmons, who is the staff director, worked for the Committee as a whole, so she is pretty familiar with what is going on, and we have hired John Shumake, who worked with David Catania, one of your colleagues on the Council. That is all he does every day, is work on the District. I think enough of it to have someone working full-time on it and working to see if we cannot be of help to you. I am very grateful for your courtesy of coming here today and look forward, Mayor, to that visit to Cleveland. I am hoping that maybe a year from now, we can get together and find out how we are doing on some of these things that we have talked about today, if you just stay with it. Our motto in Cleveland was, ``Together, We Can Do It,'' and together, you can do it. Thank you very much. Mr. Williams. Thank you, Mr. Chairman. Ms. Cropp. Thank you. Ms. Rivlin. Thank you. Senator Voinovich. The meeting is adjourned. 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